When it comes to offering a personalized product recommendation or a personalized experience of any kind, most would say you really need to know a person, a buyer persona, or a demographic (to a point – they’re not … entirely … monolithic) on a certain level. This is done much more easily in person, where body language, gestures, and direct interactions with products are observable.
But now that the retail landscape has undertaken a substantial transformation, with ecommerce sales soaring to $4.9 trillion worldwide , the ability to offer a personalized customer experience on your ecommerce website is more important than ever.
An online user experience brings convenience and choice to the consumer’s doorstep. No traffic, no annoying co-shoppers, and relatively no stress from the inflationary gas prices!
This brings us to the idea of ecommerce personalization. What is it, and how do you provide it? Personalized marketing goes beyond simply putting a name in an email (or an email subject line). Let’s dig into the what, why, and, perhaps most importantly, the how.
What Does Ecommerce Personalization Mean?
Ecommerce personalization is an essential practice for businesses, and you’ll be hard-pressed to find an online store without it.
Essentially, personalization determines relevant offers and content to present to users based on their data – demographics, search or browsing history, past purchases, website engagement, and more. That’s why every website you land on now asks if it can use “cookies” – it just means you are allowing the site to use your data. An ecommerce personalization platform is the software solution that serves up the best personalized recommendations.
A personalized shopping experience might look like seeing a “suggested for you” section while you’re browsing an online store, or it could be an email with the subject line “gadgets we think you’ll like.” Ecommerce personalization reaches customers through multiple channels, and there are countless ways it can be implemented.
Importance of Ecommerce Personalization
91% of consumers report that they’re more likely to shop with brands that offer personalized product recommendations. But the importance of ecommerce personalization stretches beyond product recommendations, it helps:
- Increase brand loyalty
- Boost sales
- Keep up with competition
Today, it’s almost impossible to survive as an online store without offering ecommerce personalization because it’s what consumers not only want but have come to expect.
As you can see, it’s clearly an important feature but why?
One reason for the rise of personalization is definitely the pandemic. It accelerated digital transformation across industries and created new online shopping habits. With fewer people visiting stores in person, it’s now more important than ever to have an eCommerce personalization strategy that delivers customer satisfaction online.
Businesses previously built connections with their customers through face-to-face interactions via their sales team, customer service reps, and cashiers. In-person customer experience relies on actual, human personalization to build strong customer connections and make personalized product recommendations. Employees can recommend items, identify and understand repeat customers, and inform them of upcoming offers.
Website personalization relies on artificial intelligence (AI) to create that same unique, curated customer experience in an online environment.
Customer data can help determine the most relevant offers and personalized content for specific visitors in a way that sales reps can’t keep up with in real-time. While there is a trade-off between real in-person interactions and digital ones, AI-powered personalization has become so effective that it can massively impact a business’s customer loyalty, sales, and competitive positioning.
One important item of note, however: is the ever-shifting data privacy landscape. While shoppers do want their experience to be personalized, they don’t want that personalization to come at the cost of their data being misused.
This has evolved into the death of the third-party cookie, but that doesn’t mean you can’t still offer great personalization. Our own research found that 51% of survey respondents would share personal data with a brand they trust. We dig into how to build that trust in our blog, Future-Proof Your Personalization with First- and Zero-Party Data.
1. Increase Brand Loyalty
More than half of consumers say they feel more loyal to a brand that “gets them.” When customers feel understood by a brand and receive custom communication, a good product recommendation, or a great offer, they’re more likely to return for future purchases. In fact, brand loyalty, specifically with millennials, increases by 28% if the customer experiences personalized communication.
Good ecommerce personalization boils down to good customer service. It’s meeting your customer’s needs before they know they have them. Feeling taken care of goes a long way in creating loyal customers.
Great personalization can come in the form of AI-powered search . By combining user intent via behavioral data with the “wisdom of the crowd,” you can personalize even for what we term “ cold start-users .” (And did you know that 70% of new traffic on ecommerce sites is from cold start users? But not all of those users are really “new”!)
Elements like query suggestions and dynamic facets, powered by machine learning, create a personalized user experience, at scale. Fifty-six percent of shoppers are more likely to return to a website offering recommended products.
2. Boost Sales
This is probably the most obvious benefit an ecommerce personalization platform has to offer.
Personalization helps grab the customer’s attention and reduces the amount of browsing time and energy a customer expends while browsing ecommerce sites. Presenting a customer with a product recommendation or offer they’re likely to prefer helps increase the chance of actually increasing conversions.
Forbes collected and published 50 different stats on the power of personalization. Here are just a few about its impacts on sales:
- Companies using advanced personalization report a $20 return for every $1 spent – Clickz
- Marketers report that personalization efforts can boost revenues by up to 15% – Adweek
- 95% of companies that saw 3x ROI from their personalization efforts increased profitability in the year after their personalization efforts. – Monetate
3. Keep Up With the Competition
Now that ecommerce personalization is so popular, ecommerce sites that don’t have them can easily fall behind their competitors. Our own research shows that 93% of consumers expect their online shopping experience to be at least equal to if not better than the in-store experience. Stumbling upon sites with poor or no personalization can be extremely frustrating for users.
80% of frequent shoppers claim to only shop with brands that offer personalization, while 66% of customers report that coming across content lacking personalization would actually discourage them from completing their purchase.
Without relevant personalization, it’s almost certain that customers will visit your competitor. (And although our research found that customers use Amazon as a primary shopping source, 46% would choose to shop elsewhere because a product isn’t available, they prefer other sites, or they didn’t trust reviews – which means there’s an opportunity for your ecommerce site, if geared with the right personalization software.)
Ecommerce personalization is necessary for a thriving online business today, but what are the best ways to use them to harness and make the most of customer data? There are opportunities for this across almost every single part of the customer journey.
10 Ecommerce Personalization Marketing Examples
1. Offer A Special Offer to First-Time Visitors
First impressions are everything! At their very first stop on the customer journey, you can entice customers with 10% off, buy-one-get-one, or a special seasonal deal catered to them. This is a great way to introduce customers to your brand and make it easier for them to say “yes” to an initial purchase.
Example: Glossier offers a 10% off deal and free shipping on $30 or more for the customer’s first order
2. Offer Recommended Searches to Narrow Options
For big retailers with different departments and offerings, visitors can get overwhelmed by not knowing where to start – especially if it’s their first time on the site.
Search recommendations can help narrow the customer’s choices by suggesting searches based on the user’s data combined with other factors like past first-time customer data.
Example: Lowe’s offers recommended searches to give the visitor a starting point
3. Suggest Popular Products
Placing popular items front and center not only helps direct customers when they arrive on your site, but it also acts as a form of social proofing to remove uncertainty around a purchasing decision based on other people’s activity.
If a customer sees that a certain type of laptop is more popular than another, it will likely influence their decision and simplify their shopping experience. This is especially helpful for first-time customers who are likely comparing products from multiple sites. “Popular” items presented can be tailored according to behavioral data from a cold-start user or an authenticated customer’s habits or recent searches. This keeps these elements relevant to the category they are shopping in.
Example: Best Buy promotes their current most popular items as product recommendations
4. Show Items Your Customer Will Like
As you start collecting more data from frequent shoppers, machine learning helps suggest relevant items that match their tastes based on past searches, clicks, and other website interactions. This type of personalization can make a customer’s user experience more enjoyable and easy, while making them feel seen by your brand.
Example: DSW provides product recommendations that the user is likely looking for
5. Help Them Complete the Collection or Look
This type of personalization acts as a friendly salesperson by suggesting what goes well with the product a customer is considering. It helps the customer see a fuller picture of the product, how it might play out in their life, and how other products could complete their purchase.
Example: Hobbs, a Coveo customer, provides styling suggestions on a trench coat product page
6. Suggest Complementary Products
Once the customer has landed on a product page or added something to their cart, complementary products are a great personalization strategy to upsell. It’s similar to suggesting items that go well with the product the customer is considering or purchasing, but rather than focusing on completing a look or a collection, complementary products can help make the experience of the current product better.
For example, someone who is purchasing shoes may need socks, or someone who purchased a table may need floor protectors to ensure they don’t scratch their hard-wood floors. This type of personalization focuses on the customer’s next step and moving them toward it based on their current activity and past purchasing data.
Example: Amazon suggests a screen protector to go with a phone case
7. Personalize Exit Offers
If a visitor clicks the exit or back button without purchasing anything, exit offers can act as a last-ditch effort to make a sale. These can sometimes come across as desperate, so framing them positively and keeping them customer-centric can help make them more effective.
Example: Express Gifts used Coveo-Qubit to detect exit behavior and persuade shoppers to complete a purchase on their site.
8. Entice Lost Buyers
Most of us have seen a cart recovery email, but the key to making them work is making it easy for customers to pick back up where they left off shopping. A “return to cart” or “continue checkout” button minimizes the customer’s efforts to get right back to it and is more actionable than simply saying “keep shopping.”
Example: Crocus, a Coveo customer, makes it easy to go directly back to the checkout cart where the customer left items waiting.
9. Email Customers With Relevant Suggestions and Deals
Sending suggestions or deals directly to a customer’s inbox can pique their interest and remind them that you’re interested in what they like. Whether it’s new items they might like or a deal especially for “insiders,” sending them something just for them can make them feel special.
Example: Banana Republic sends customers items curated especially for them
10. Bring Customers Back With A Special Deal
This personalization tactic is based on a lack of interaction with a site and can help bring back customers that have spent time away from a certain brand. This is often a profitable effort for companies because acquiring new customers can be more expensive than simply retaining old ones. The come-back personalized email can help revive an old customer and invoke their loyalty.
Example: Sephora sends Insiders who haven’t purchased in a whole a special 10% discount
These 10 examples highlight the importance of ecommerce personalization in your online shopping experience. Employing these examples in your own ecommerce efforts can help move the needle toward a profitable business — and away from a website that no one visits.
If you’re struggling to achieve successful personalization on your site, check out our Ultimate Guide to Personalization in Ecommerce for insights and tips on how to change that.
Want to learn even more about personalization? Check out our blog post One to One Digital Personalization: Fact or Fiction?.
And while you’re at it, read our blog Powerful Personalization in Ecommerce – No Big Data Required to learn how to personalize your website while with limited resources.